Best Of 2016: The Cheapest ETFs In The World

July 27, 2016

ETF Giants Usually Low Cost

All that said, ETFs such as EEM are the exception rather than the rule. Most of the ETF giants are extremely low cost, which is great for long-term investors.

As Matt Hougan, CEO of InsideETFs, often points out, an ETF investor can put together a well-diversified portfolio with exposure to all the major asset classes for next to nothing in fees―as little as 0.08% (8 basis points) according his last tally from November.

Today the world's cheapest ETF portfolio is even cheaper―at least temporarily.

Two REIT ETFs, the Real Estate Select Sector SPDR Fund (XLRE) and the Guggenheim S&P 500 Equal Weight Real Estate ETF (EWRE | D-85), currently have expense ratios of zero, as the funds absorb assets from their sister funds, the Financial Select Sector SPDR Fund (XLF | A-94) and the Guggenheim S&P 500 Equal Weight Financials ETF (RYF | A-84). This is being done to comply with Global Industry Classification Standard sector change, which splits REITs from the broader financial sector.

Fees for XLRE and EWRE will be waived until September, when they will increase, likely making the Schwab U.S. REIT ETF (SCHH | A-88) the low-cost leader when it comes to REIT ETFs once again, with an expense ratio of 0.07%.

As the table below shows, XLRE and EWRE are currently the lowest-cost ETFs on the market, followed by a number of ETFs from Charles Schwab, BlackRock (iShares) and Vanguard, with dirt-cheap expense ratios.

20 Cheapest ETFs

Ticker Fund Issuer Expense Ratio
XLRE Real Estate Select Sector SPDR Fund SSgA 0.00%
EWRE Guggenheim S&P 500 Equal Weight Real Estate ETF Guggenheim 0.00%
SCHB Schwab U.S. Broad Market ETF Charles Schwab 0.03%
SCHX Schwab U.S Large-Cap ETF Charles Schwab 0.03%
ITOT iShares Core S&P Total U.S. Stock Market ETF BlackRock 0.03%
VTI Vanguard Total Stock Market Index Fund Vanguard 0.05%
VOO Vanguard S&P 500 Index Fund Vanguard 0.05%
SCHZ Schwab US Aggregate Bond ETF Charles Schwab 0.05%
BND Vanguard Total Bond Market Index Fund Vanguard 0.06%
SCHG Schwab U.S. Large-Cap Growth ETF Charles Schwab 0.06%
SCHV Schwab U.S. Large-Cap Value ETF Charles Schwab 0.06%
IVV iShares Core S&P 500 ETF BlackRock 0.07%
SCHD Schwab US Dividend Equity ETF Charles Schwab 0.07%
SCHA Schwab U.S. Small-Cap ETF Charles Schwab 0.07%
SCHH Schwab U.S. REIT ETF Charles Schwab 0.07%
SCHM Schwab U.S. Mid-Cap ETF Charles Schwab 0.07%
SCHP Schwab US TIPS ETF Charles Schwab 0.07%
IUSG iShares Core U.S. Growth ETF BlackRock 0.07%
IUSV iShares Core U.S. Value ETF BlackRock 0.07%
AGG iShares Core U.S. Aggregate Bond ETF BlackRock 0.08%

 

Investors can mix and match these ETFs and others to come up with their own diversified portfolio. Use the ETF.com screener and database to sort ETFs by expense ratio and a host of other categories.

Contact Sumit Roy at [email protected].

 

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